LUR Adams | Master Investor

 

Even master real estate investors had to start as apprentices but it’s not that steep of a learning curve if you are really up for it. Taking a cue from the great Robert Kiyosaki, Adam A. Adams started right away in multifamily real estate (not counting his 2005 cabin lot). What credentials did he start with? Of course he didn’t have any, which makes his story even more compelling. Listen in as he shares with Lisa Hylton how he pulled off an unbelievable start, learned the ropes with a mentor and eventually built his own, recession-proof real estate empire. Adam has had enough good and bad experiences to last a lifetime for him and anyone he mentors. Now, through his coaching program, meet-up group and podcast, he takes what he learned along his journey to educate and inspire other investors. If you think it’s impossible for you, the regular Joe, to achieve the success the likes of Kiyosaki and Adams did, this episode will make you think otherwise.

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Persistence And Determination: The Real Estate Journey Of A Master Investor With Adam A. Adams

I’m back with another amazing guest for this episode. Before we get started, I want to encourage you to please check out my website which is www.LisaHylton.com for a passive investor guide. Breaking down all the different things that you need to know to confidently passively invest in your next real estate deal. Our guest is Adam Adams. Adam is also known in the real estate community as Triple A. He has educated thousands of investors through real estate conferences, radio and podcast interviews, his coaching program, and his thriving Meetup group.

Adam hosts the Creative Real Estate Podcast, a podcast that’s listened to around the world with hundreds of thousands of podcast downloads. His effort is to educate and inspire other investors, which has earned him the prestigious title of Master Investor by Think Realty Magazine. He is also the three-time Hall of Fame winner from RE Mentor for his successes in multifamily syndication. Meetup.com recognized him as 1 of the top 6 Meetup organizers in the world in 2018. Adam, thank you for coming on the show.

Thank you for that awesome intro.

I met Adam initially at a Meetup here in Los Angeles in the Marina del Rey area. I remember it distinctively because he was known for doing tons of meetups and successfully connecting with tons of people. I was blown away by it. I also remember what you covered that day, which was you broke down the splits of how general partners are compensated, and I took notes. I’ve shared those notes time and time again with other people. There’s so much value, so thank you.

I was on a virtual Meetup because Coronavirus made us do a lot of virtual meetups. I was on somebody else’s virtual Meetup and we went through the whole presentation, and then we got to the Q&A. Somebody says, “I can’t find anywhere these splits. What is it supposed to look like?” I was like, “It’s a good thing I’m just sitting at my computer. Are you okay if I share my screen?” I pulled up the same presentation that I gave at Marina del Rey in LA and I was thinking about you guys. I was like, “That’s funny.” I said to everybody at the meetup, “Do you know what’s funny? I never see anyone but me sharing the different splits.” I’m glad that you’ve been able to share it with lots of people because more people need to know what it is supposed to look like if you’re syndicating a deal and co-partnering.

We’re going to get more about how you play. To get started, how did you get started investing in real estate?

How I got started was because of my stepdad. I grew up in Utah. I was born in a polygamous colony. Everybody asked that question. They want to know that question. They think the answer is going to be no, but it was yes. It still is yes. I was born like that. My mom left and she was like, “I want to start my life over.” She marries this guy, my stepdad, Jeff, who is a real estate investor and an entrepreneur. I grew up from five years old thinking that it was normal. Around the time I was 8 or 9, it’s the first time I ever collected rent from one of our multifamily units. We lived close by and my stepdad was going to be home late. Speaking of late, the tenant at the multifamily was behind on their rent and he wasn’t going to be able to make it. I was young at 8 or 9-ish years old. He said, “Can you go over there and grab this rent?” I remember young collecting rent for the first time. It wasn’t until 2005 though that I owned a piece of America. About 2005, I finally owned a piece of America. It wasn’t a house and it wasn’t multifamily.

Everybody asks, was your first real estate investing a single-family? No, it was just a cabin lot. I bought it for $100 and I sold it for $12,000. That was the most money that I had ever made in a year back then when I was in college making tips. I got my $12,000 and I thought to myself, “My stepdad has been trying to tell me since I was five years old that I needed to do this.” I read the book, Rich Dad Poor Dad, in 2007, and that’s when I got into multifamily. I started managing three different properties, 23 total units, and then I bought my own in 2008 during the crash. Fun fact, I lost it in 2011, which makes me think a little bit about Coronavirus because in 2008, there was a crash, but I didn’t lose my property until three years later because there was an aftermath. Everybody thinks this is going to be a V-curve. I’m saying I’m sure it’ll be a non-steep U-curve. It’ll be in the gutter for a little while and there’s going to be some aftermath. That’s my start.

In 2007, you bought small multifamilies.

I started managing them. In 2007, I was a manager of three different properties, 23 doors, and then in 2008 is when I purchased it.

LUR Adams | Master Investor

Master Investor: This is not going to be a V-curve, but a non-steep U-curve. It’ll be in the gutter for a little while and there’s going to be some aftermath.

 

Would you consider that property management?

It definitely is property management. I didn’t get a realtor license. What I did is I lived in the eighteen-unit building and I managed that whole complex. Plus, I managed the fourplex and his condo, but it was all for the same guy, Reed Quinn. I lived in Utah and I was managing all of these.

Was this a deliberate decision?

Yes. As I was reading Rich Dad Poor Dad, I was like, “This guy is fascinating.” I started doing some research on Robert Kiyosaki and I was like, “He’s talking about real estate, investing in stocks, and running your own business being a good thing. I’m going to do this stuff.” I started to look at real estate and look at what Robert Kiyosaki did in real estate and I learned something that almost nobody knows. Robert didn’t do single-family. That’s why I decided to skip. I decided to go from that land and straight into multifamily because Robert Kiyosaki went straight into multifamily.

Everybody assumes that he has single-family rentals. He’s never had one. He invests in multifamily syndication. That’s what I thought I would do. I started doing apartments. In 2007, I was like, “How can I?” The book says, “How can I?” The book says, “Don’t say, “I can’t.” Say, “How can I?”” I was like, “I don’t have this.” Most people would say I can’t but I was like, “How can I?” I said, “What I could do is I could call all of the multifamilies. It doesn’t matter if it’s a duplex or 100-plex. I’ll call every multifamily on rent and I will get on the phone and I will say, ‘I want to come and manage your apartment. I want to live there for free. I want to collect the rents and learn about apartment investing because that’s what I want to do.’”

In 2007, that’s exactly what I did. It was the fall of 2007. We were about to go back to school, and I started making calls. The first person said, “Absolutely not.” The second person said, “Are you licensed?” I said, “No.” He said, “Absolutely not.” The third person said, “Do you have experience?” I said, “No.” He said, “Absolutely not.” The fourth one said, “Why are you calling me and asking me if you want to come and have free rent when I’m trying to rent this out?” The fifth person said, “No.” The sixth person said, “No.” I get ahold of Reed Quinn and he goes, “That might work. I’d like to meet you.”

He became my mentor and he started teaching me how to do everything. The first multifamily that I bought after managing his and making him millions of dollars in just one year, he helped me buy my first one, so it’s crazy. I don’t recommend my script of, “Can I please come and live for free and manage your apartment? I’ve never experienced this at all, but I’d like to.” I don’t think that was an effective script but what was effective is even if I had 99 noes, I would have called someone again. That’s something that resonates with me.

I’m sure there were a lot of lessons you’ve learned from the experience of managing Reed’s properties that you took when you decided to invest in your first one. To get started, what were probably some of the ones that stood out to you?

The biggest one was upgrading units. When I started managing that eighteen-unit complex, I remember the top because it was 3 floors and 6 across. At the top right unit was the first one I ever turned over. The rent was about $500 or $550 for a three-bedroom and one bath. Reed said, “What you need to do is instead of having all white paint, you need to do two-tone paint.” Back then, creams were in. In 2007, that’s when you wanted to have an off-white, creamy, brown, tan color. Now people are like, “That’s many years ago. We need gray.”

Everybody assumes Robert Kiyosaki had single-family rentals. He's never had one. He invests in multifamily syndication. Click To Tweet

Back then he said, “You need to do 2-tone or 3-tone paint. The ceiling needs to be flat white. The walls need to be this tan and then the baseboards need to be a shiny, high-gloss white.” I was like, “I can do that.” He said, “You need to replace these old rubber baseboards.” It’s like the rolled baseboard that you would put in offices. That’s what we had in there because it’s cheap, easy and durable. You can’t dent it. He goes, “I need you to pull these off. I need you to put in a new baseboard that has a design to it.” A white baseboard that we paint and it has a design.

He quoted out how much it would be. He said, “This carpet that folds back into itself. When you get rid of that, we need to put in regular carpet,” which is funny because now I’m learning you’re supposed to do vinyl planks and stuff like that. Back then, he was like, “I want you to have actual carpet that’s $30 a yard instead of $12 a yard, so double that. Take the linoleum out of the kitchen and replace it with travertine tile. This matches the off-white, tan walls. Switch it for travertine.” That’s what was in back then. Now, marbles are in.

Do you know what’s funny? I replaced in the shower. He said, “You’ve got to replace the white subway tile.” He said, “Get rid of this stuff. It’s ugly and nobody likes it. Get rid of the subway tile and switch it for the travertine.” I did that on the walls in the bathroom and on the floor. I swear, not five years later, subway tile back in. Everyone’s like, “I love your subway tile on your kitchen backsplash.” Back then, we were trying to get rid of that stuff. We got rid of the subway tile and we switched it out for travertine, and that was it. Just flooring throughout the whole place, carpet and tile, walls in the bathroom, and the paint.

That’s all we did because I was getting paid $12 an hour or maybe it was even $10. It was not much. The labor and the materials ended up costing him to get all of this stuff done, usually less than $2,000 for the whole unit, which sounds nuts to me because I would easily pay $5,000 for that now. We used to be able to get this done for less than $2,000 and what ended up happening was that $500 or $550 rent became $900 to $915, so almost double or getting close to double.

He bought it for about $1 million, and then he sold it for $2 million. We also did the laundry so all of those things stuck with me. Your question is, what did I learn from Reed that I did to my own property? When I bought my small multifamily, in one of the units, what I did was I went to the kitchen and redid it. I switched out the floors for vinyl plank, randomly enough. I switched out the flooring for a floating plank tile, and then I repainted it. That was all I did.

On my units, I was able to go from $600 to $750, which is not huge, but when I bought it, they were $600 and when I was renting it out, they were $750 or $800 per unit. I learned a little bit about that. There were some things that I did wrong also, but it blew my mind that all I did was spend $2,000 in one unit, $2,000 in another unit, and $2,000 in another unit. Out of nowhere, he sold his eighteen-plex with my work and he made $1 million. He sat at home the whole time. It’s amazing. I love multifamily.

Do you think that there was something about the way he thought about maybe his business and his life that was different from a lot of the other people that you spoke to? That saw the power of leveraging someone who didn’t necessarily have the credentials that they were looking for, property management certification and license. He was able to still pour into you and give you the direction you needed to have to then execute on the things that needed to get done. At the end of the day, he was still able to then get a good profit and probably not have to pay as much to some fancy licensed and credentialed person.

Two things. There’s something about him and me that resonates. There’s something about our vibe that resonates. You get that sometimes like we are on a first date. You know in the beginning, you’re like, “I’m never going to see this person again.” Other times, even if the person is not the most awesome person you ever met, you love getting along with them and you love talking with them. All you want is to keep hanging out. You want to support them, help them, see them grow, and maybe even grow a life together. Even on a first date, sometimes you get that.

We clicked. Reed was like, “I’ve been looking for someone like this. This guy seems like a good guy. I also want to give back to someone who’s brand new at this.” He had all these rentals and he was doing well for himself. There was a young whippersnapper in college that was eager and he must have said to himself, “I want to be part of that. I like this guy. I get along with this guy. I was this guy.” He just decided that he would like to mentor me.

Fast-forwarding into the way you bought your first multifamily. How many units was that one?

LUR Adams | Master Investor

Master Investor: There’s no reason for you to mix business and family. It’s harder to say, “You can’t pay it. What am I going to do? I can’t kick you out,” but you should though.

 

It’s three units.

You led with the fact that you ultimately lost the property. Can you talk about the highs and lows of this experience?

The highs were when I proved it to myself that I could close one. I got the experience, good and bad that will last a lifetime for me and for anyone that I mentor. Those are the highs. Right before you and I got on this podcast, Lisa, I was a few minutes late because I was on the call with my attorney. That is a direct lesson from this triplex. The only reason I was on the phone with an attorney is because I remember how bad it hurt not having an attorney with the triplex. This is what I mean. With Reed, he gave me this nice contract that he paid his attorney for. All he did is he said, “Here’s the application that my attorney wrote. Here’s the contract that my attorney wrote. Here’s the process that you have to follow.”

When I go into this new unit, the first thing I think is, “That’s awesome that I’ve already got tenants in the other units. I’m going to move into one of the units as soon as somebody moves out.” I bought it fully rented and leases in place. I never thought I needed to go talk to an attorney but then about a year later, in 2009-ish when the economy was a little rough, I lost a tenant. I was looking for a tenant to move into that unit because I was bleeding cash because I still had to pay the whole mortgage, but I didn’t have this tenant in. I was usually making $300 but now I was spending $400.

I was losing $400 a month because it was in a bad type of part of the economy and I was afraid of spending money with an attorney. I was in desperate need of having someone fill that unit and I was extremely naive. I’m still naive for sure but back then, I was even worse. I was optimistic. I believed every human was good. I still do but I’ve learned to trust but verify over time. I will always trust but it’s like, “I trust you, but I have to verify.” That’s how I am reluctantly having contracts signed, but back then I was like, “It’s all good. You’re fine. You say you can pay it, let’s pay it. I’m not even worried about a contract.”

It was horrible partially because I didn’t want to spend the money with an attorney. Partially because I was like, “That’s going to slow me down and I need you in now.” Partially because I was a naive little kid, still in college, and hadn’t been hurt yet. This was the first time that ever hurts, so I moved somebody in. I lived in a three-bedroom and I had two tenants. I had a two-bedroom that was full, and then a one-bedroom that was full. This was how it was. People started being like, “We need to downsize. I lost my job. I’m moving in with my parents. We’re moving into a smaller apartment.” I was like, “I totally get it. You’re fine. You can get out of the lease. I’ll just fill it up.”

I had all these units that I couldn’t fill up and I felt anxious and nervous. I did the fastest thing that I could and I paid for it royally a couple of years later as I was still paying the mortgage. At the time, I became a handyman because of that eighteen-unit complex that I was managing. It was cheaper for the landlord for me to do the job and I learned that I was good with my hands. I was good with electric, tile and plumbing. It came naturally to me, so I started doing that. Other people in my neighborhood, at my church, they were like, “Can you do that for me?” I started being like, “Yeah, for $25 an hour.” “Yeah, for $35 an hour.” It’s at $65 an hour. This is 2007 or 2008. I had thirteen employees, all of them getting paid about $10 or $15 an hour but I was collecting anywhere from $35 to $65 an hour so every day, I was netting thousands of dollars.

During this time, you’re still going to college too?

Yes, I’m in college. The summers are the busy time for handyman stuff. You’re not in school during the summer. I was in college and I had thirteen employees, so I was making decent money by sending my employees. Even during college, I would have thirteen guys out and I would be taking eighteen credits at the time because I was maxing out what it would let me do so I could get done as soon as possible. Here I was not netting hundreds of thousands a year and thinking that I was the bomb, and I was in college.

If you get the right people in, even though you're missing in some areas, you will make it work somehow. Click To Tweet

Most of my friends in college were making $10,000 or $15,000 a year. 2007 was the first time that I made that $12,000 at once, and that’s when I started my handyman company. Through 2008, $20,000 a month at least netting. Nobody was doing that unless they had graduated from college and been in their business for years. This was a long time ago, too. Anyway, what ended up happening is in 2009, I laid a couple of people off. In 2010, I laid a couple of people off. In 2011, it was just me and two other people. If you wouldn’t believe me, one of them was my tenant. One of them lived at my unit.

The only reason I didn’t lay him off is because he needed to pay the rent because it directly affected me. His name is Jose, a great guy and he had a giant family in the two-bedroom just above me. What a good guy. I miss him, but he wasn’t able to pay the rent. I was like, “I’m going to give you all the jobs. I’m going to take the other ones.” In 2011, out of nowhere, I called up the landlord, which by was not a bank. I called up the owner, the lender and I said, “I’m not going to be able to pay my mortgage this month.” He tried to give me all these ideas and I’m like, “I’m out of money. I’ve been paying you even when I haven’t been making money and now I can’t pay it.”

It’s all from mistakes of pulling in the wrong tenants and not betting. I had my employee staying with me and he’s a great guy but there’s no reason for you to mix business and family. It’s even harder than to say, “You can’t pay it. What am I going to do? I can’t kick you out,” but you should though. It’s difficult, especially when you have a soft heart like I do. A lot of the readers are like, “I’m that way too.” We got to stay away from having our family be our tenants. There are a lot of learning stories in there but the ones that we’ve shared are good takeaways.

Fast forward to jumping into how you play into real estate?

I have a few companies. Some of them are holding companies. One, I help people with virtual assistants, and I help people with starting podcasts, and then my biggest company is called BlueSpruce Holdings. I am the Founder of the company and I have two partners. That company had thirteen on staff and our only role was to find big apartments, raise private equity for the apartments, close on them, manage them, sell them for a profit and split those profits with passive investors and all of my partners. There’s a lot of us to split it with but I like that because we are like the yin and the yang. We’re like the whole puzzle because I’m good at some things and I’m terrible at most things.

If you get the right people in, even though you’re missing in some areas, you are able to make a beautiful picture. Here we are, puzzle pieces. We pull this together. It’s thirteen. One of the bigger syndication companies I know of, most of them are three people but we couldn’t do it without that. We need a couple of people on acquisitions. We need a couple of people on asset management or else we’re going to make a mistake. We need a couple of people raising equity or else we’re not going to be able to close on time. We need a couple of people with all the pieces. That’s why we built that team.

Do you focus on a particular asset class? Did you say apartments or do you do other than apartments?

We only do multifamily apartment communities and most of them are about 100 units. We’re managing 4 buildings, 4 communities and it’s about 380 doors or maybe 385. That’s within BlueSpruce Holdings. I also have partnered mostly as a limited partner, as a passive equity, just an investor into some other deals. There are 1,100 more doors that I’m a part of that BlueSpruce doesn’t manage, so about 1,400 doors total.

For BlueSpruce, do you focus on a particular market?

Everybody reading should focus on one particular market. Everybody reading should definitely do that. The plan for us is to do that. I own property in six different states. BlueSpruce owns property in three states. One property is in DFW and one property is in Big Spring, which may as well be a totally different state because of how far they are apart. They’re totally different markets, but we also manage in Missouri. I sold four properties in Missouri, but we still have 183 units in Branson. We’re in Connecticut, Atlanta, and Big Spring, then I’ve got a couple of others that I own outside of BlueSpruce.

LUR Adams | Master Investor

Master Investor: Everybody should focus on one particular market.

 

As someone reads your story, lots of different experiences being an entrepreneur and investing in real estate. You invest not only through your own company buying properties actively, but you also invest passively. Can you share with them some of the tips or insights, the things to look for as you’re thinking about investing passively with a syndicator?

There are a few things that you need to look at off the top of my head that should help all the readers. Number one, you want to understand what is the track record of the sponsor. You want to do due diligence and background checks on every sponsor. For example, in my team, there are three partners. There are three of us that own BlueSpruce Holdings. I’m suggesting that you do a background check on Adam, Manny and DJ. You would do three different background checks and it’s going to cost you $30 for me, $30 for Manny, and $30 for DJ. Do a background check.

The third one on vetting the operator that you don’t usually hear is getting a referral. When we are on Amazon, why is Amazon popular? It is not because you could buy socks when you’re just in your underwear. It’s not because of the convenience. The real reason why it’s popular is that every product has ratings and reviews. You can read those ratings and you can have social proof whether or not it’s a good deal or a bad deal because of what others have said, and then we know that when we’re shopping in our underwear, but we forget it when we’re about to invest passively in a deal.

We forget that we need to call references. We need to find out who else is invested with this person. What did they get? How did it feel to them? Did they get paid on time? Was there good communication? You want to ask these types of questions to somebody who’s already worked with that sponsor. That’s three things on vetting the operator. It’s not everything on vetting the operator, but you also want to vet the market because a lot of operators are going into terrible markets because they can’t find good cap rates in certain areas that are nice. They’re going somewhere that’s crappy and they’re not doing the vetting of the market. They’re telling you, “We got this at a 10% cap.” I would never buy a 10% cap. It sounds terrible and risky. There’s got to be a problem. I had a guy come to me and say he was doing 22% caps in New York City. 22% caps in a 2% cap area, that’s twenty times less. If it was worth $1 million, you’re going to pay $50 or something. Anyway, I doubt it. If you’re finding a 20% cap or a 10% cap, it doesn’t mean it’s a good deal. A good solid market with good metrics means it’s a good deal. A couple of things to look at is, what is the population?

My team wants to have no less than $1 million. Other teams, if they have at least $100,000, then as your passive investor, you can start to be like, “I might do this.” If they’re trying to buy in an area that has 4,000 people or 20,000 people, we think that it’s reckless. It’s too small and you’re probably not going to hit your pro formas. One big thing is the market size. My team, we look for $1 million-plus, but if you’re a passive investor, I don’t feel like you’re going to even be close to safe unless you have at least 100,000 people living in that city.

There are job growth and job diversification. You want to make sure all of this kind of stuff for the market. The third major point, we talked about the team and we talked about a couple of pieces of the market. What about the deal itself? There are things you can do with the deal to make it look good even if it’s terrible. I could make any deal look amazing by tweaking things like how fast it will increase rents, by tweaking the reversion or the sell, the cap rate at the exit when we get rid of the property.

If I say that cap rate is going to be a 4% cap and you’re a passive investor, you don’t know what that means yet and you want to invest in it. If I put it as a 4% cap and we’re going to sell it at an 8% cap, what it means is that I’m telling you we’re going to sell it for twice the price. If you think that it’s going to be sold for $10 million and the pro forma looks good and we only sell it for $5 million, you’re going to lose money so you want to understand the deal. The best way to understand a deal and a market is to find a way to get some education. Whether it’s free education or inexpensive education, there are a lot of good resources out there but you want to dive in and understand a deal before you invest into something passively. There are too many operators that are getting into bad markets or they don’t have any experience or they tweak a couple of things to make it look like you have a 16% IRR when you are going to have an 8% IRR or lose money. That was my big tangent. There are a lot more details that we can go into.

I connected to that is the impact of COVID on multifamily. Your thoughts on it and tying back to passive investors or even active investors who are looking to invest in multifamily.

If you’re an experienced passive investor and you’re investing with an experienced team and you feel comfortable, I don’t want to hold you back from doing what you think. If you’re a complete brand-new passive investor and you haven’t seen a few market cycles and you haven’t invested with a few people yet. My suggestion coming from a place of my tail was between my legs for a few years after 2008, and this is going to be a difficult thing with a lot of aftermaths, would be to watch the market for the next three months, and then to make your assessment. There’s no need to invest right away, right now, today. We’re doing this in June 2020, so I’m saying come in September 2020, everything that I’m saying is going to be different. Everything that I’m saying means that we need to relook at it. There are riots, COVID and a terrible market. The market is bad. There’s probably going to be a lot of inflation on properties. There’s probably going to be a lot of inflation on gold. The dollar is probably going to get weaker.

If you persist and never quit, you will be able to accomplish anything in this world. Click To Tweet

My suggestion is to wait at least three months and then reassess. It’s like when I was climbing a hill, Lisa. My grandma lived on the mountain. In Utah, she lived off of 33rd south right up on the benches. There was this tree that I saw. I looked up at the hill and there was a tree and it looked like it was at the exact top of the mountain. I thought that I knew where it was. I was like, “I’m going to climb to the top of the mountain.” When I got to that tree, I wasn’t even half up the hill. That’s where we are. I can see so far and it doesn’t look like it is safe yet, but we need to get to that tree first and see what else is still up there before we decide if we should be passively investing or buying any type of real estate or gold.

At this point, these are my Level-Up questions that I ask all of my guests. The first one is, what are you grateful for in your life?

I’m grateful for my kids. I was able to sleep in a tent one time with my youngest son out by our little creek. The biggest thing that I’m grateful for is that I have that relationship with my boys.

What has attributed to your success and continuous growth?

It is the persistence and determination. When I was in great junior high school, my band director had us memorize this quote by Calvin Coolidge. Part of that quote is, “Persistence and determination are omnipotent.” I said this every single day in the band. Meaning that if I persist and never ever quit like calling those different property managers, then I will have all power and I will be able to accomplish anything in this world. What’s been there for me the most is that relentless nature.

What do you now know that you wish you knew at the beginning of your journey?

It’s how much property prices would go up. The $12,000 that I sold that for was actual land, it would be worth a lot more. When it all comes down to it, I’ve gotten a lot wiser. The biggest piece is cashflow. There are many people ruining their lives flipping houses making $10,000 or $100,000. It doesn’t matter. They’re done, and then they have to do it again. They’ve always got to work and if they stop working, they don’t make money. If I would have internalized cashflow and compounding interest better at the beginning, I would have stopped trying to make chunks of money but instead, streams of money.

Thank you, Adam, for coming on the show. Is there anything else that you want to share with my audience that I didn’t touch on? You can share now, as well as if they want to reach out to you, what’s the best way to do so?

Probably the best way for them to reach out is to go to RealBlueSpruce.com. That’s our website. They can click and get on the list if they want to be a passive investor. They can find my email there, find my bio there, can learn about my team and the deals we’ve done. That’s probably the best place to send anyone who wants to connect with me.

Thank you for coming on the show. I appreciate it.

LUR Adams | Master Investor

Master Investor: Watch the market for the next three months, and then make your assessment. There’s no need to invest right away right now.

 

Thank you. I appreciate hopping on.

Thank you, Adam, for coming on the show. It’s such an awesome episode. There are some good nuggets here. I enjoyed his story. I had no idea that’s how he began in real estate investing. For me, some of the key things that I thought were essential in this episode were number one, persistence and determination. Many times in life, we see people at the pinnacle of their careers and success and forget that they may have faced a lot of noes on the way there. In his story when he shared about how he got started, that deliberate decision to manage assets, get into property management and get that experience, and the number of noes that he faced along the way. He’s not willing to give up.

Number one, persistence and determination towards your goals and not giving up. Number two, his team. He noted that he has a large team of thirteen people, but how important it is to have all the different people in play to help in terms of building the business, finding the deals, and making sure that things run the way that they should. They’re able to ultimately achieve the goals that they’re setting out. Regarding the market he talks about, it’s important to focus on your particular market and how important it is to hunker down and make sure that you know what market is that you’re trying to get into.

The other item, which was last but not least, is I asked him about the impact of investing in this market climate as we continue to move through these next uncertain times. He talks about making sure that you understand the business plan of the particular investment that you’re going into and some of the key things are some of the assumptions that are being made. One, the income projections in terms of what kind of rent. Are they reasonable? Just looking at them and assessing if they are reasonable.

Number two, the planned sale price. Is it reasonable? He also talks about the cap rates. A higher cap rate is indicative of a cheaper price that you’re getting a good deal. Whereas lower cap rates are generally indicative of a higher price. Those lower cap rates are usually on properties that have a lower risk. For instance, Los Angeles is notorious for low cap rates because this is a lower risk environment when you buy an investment here. There are tons of population growth and lots of jobs, but it causes lots of money to buy the asset.

In terms of cashflowing and making your money, you’re going to need to have a far longer whole period to achieve some of those investment goals. Whereas he was talking about people finding 20% caps in New York. Maybe they can, I have no idea. As he pointed out, taking a step back and saying, “Is that reasonable?” Understanding the market that people are just not going into any market to find a deal. The market has those fundamentals of job growth, population growth, etc. It’s another awesome episode. If you haven’t met Adam Adams, I hope that this episode has introduced you to him. He’s an awesome real estate investor and a great guy, so definitely check him out.

If you haven’t checked out my website, definitely please go and check it out. That’s www.LisaHylton.com. If you are a passive investor and you’re looking for resources to learn more about passively investing in real estate and doing that confidently. If you’re ready to chat with someone and set up that time to talk about opportunities coming up, feel free to check out my website. Get on a call with me and we can talk about it and you can learn more about opportunities that might be coming up in the future. Until next time. Keep leveling up. Take care. Bye.

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About Adam A. Adams

LUR Adams | Master InvestorAdam started investing in real estate in 2005. After repositioning his first apartment community in 2007 (from a $2MM value to $4MM value in 12 months) as a property manager, Adam bought his first multifamily apartment building.

Since then, Adam has managed several single-family fix & flips and holds over a hundred multifamily rental doors. Adam is the organizer of Colorado’s most active real estate group, and he hosts the Creative Real Estate Podcast. Adam has been a guest on countless popular podcasts including the Best Ever Show, Investor Army, and the Investability Podcast.

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